The rule, which the EPA released earlier this summer, requires Texas power generators to make dramatic reductions in emissions beginning January 1, 2012. While Luminant is preparing to meet the rule’s compliance deadline, it also filed a legal challenge in an effort to minimize the harm this rule will cause to electric reliability in Texas.

To meet the rule’s unrealistic deadline and requirements, Luminant reluctantly decided to idle two generating units and cease mining Texas lignite at three operations. Luminant will also have to implement several other actions to reduce emissions, including making substantial investments in its facilities.

“Luminant is committed to complying fully with EPA regulations. We have spent the last two months identifying all possible options to meet the requirements of this new rule, and we are launching a significant investment program to reduce emissions across our facilities,” said David Campbell, CEO, Luminant. “However, meeting this unrealistic deadline also forces us to take steps that will idle facilities and result in the loss of jobs.

“We have hundreds of employees who have spent their entire professional careers at Luminant and its predecessor companies [TXU Mining],” Campbell said. “At every step of this process, we have tried to minimize these impacts, and it truly saddens me that we are being compelled to take these actions. We have filed suit to try to avoid these consequences.”

Luminant’s suit in the U.S. Court of Appeals for the District of Columbia Circuit seeks to invalidate the CSAPR as to Texas. Further, to try to stop the adverse effects on Luminant, its employees and its customers in advance of the compliance deadline, Luminant will seek a judicial stay of this rule because of the immediate and irreparable harm it will inflict.

To ensure compliance in this extremely compressed time frame, production and operational changes will have to be made at two of the company’s largest power plant and mining complexes.

The Monticello power plant in Northeast Texas will idle Units No. 1 and 2, approximately 1,200 mw. Monticello Unit 3 will switch from Texas lignite to Powder River Basin (PRB) coal. The supporting Thermo and Winfield mines will cease operations. Units No. 1 and 2 at the Big Brown power plant in Freestone County will also switch to PRB coal. Mining will cease at the supporting Big Brown/Turlington mine.

Luminant will continue to mine Texas lignite at its Kosse mine, which supports the Oak Grove power plant; at the Three Oaks mine, which supports the Sandow power plant; and at its Martin Lake mines, which support Martin Lake power plant.

The company expects to invest approximately $280 million by the end of 2012 and estimates it will spend more than $1.5 billion before the end of the decade in environmental control equipment to comply with the now regulatory requirements. Unfortunately, the rule’s 2012 deadline will not allow for the permitting, construction and installation of new equipment in time to avoid the announced closures.

Luminant submitted to the EPA a request for reconsideration and stay of the new rule on August 5. The agency has not acted on it. The company then filed a petition with the U.S. Court of Appeals for the District of Columbia Circuit asking the court to invalidate CSAPR as to Texas. As part of its action, Luminant also plans to ask the court to stay the applicability of the EPA rule.